Ukraine has became the most attractive destination for IT outsourcing in Eastern Europe, according to a study published June 2007 by Global Offshore Associates Limited, an IT-outsourcing consultancy.

The country’s relatively low-cost software development industry earned about $246 million in export contracts in 2006, 47 percent more than in the previous year, the study concluded.

Other estimates suggest the business was worth significantly more last year, but exact figures are hard to come by, as a significant portion of earnings are not declared in efforts to avoid tax payments.

Ukrainian Hi-Tech Initiative, an alliance that unites Ukrainian offshore IT outsourcing providers, estimates the size of the Ukrainian software outsourcing market at about $600 million in 2006.

According to the alliance, Russia exported around $1.2 billion worth of IT services in 2006, while the world’s leading software services vendor, India, received around $18 billion last year for exported IT services.

These figure show that Ukrainian software exports are only a tiny fraction of the world’s top export-oriented software development business. However, industry insiders expect Ukraine to continue developing more software for foreign clients in the next several years., steadily earning its fair share of the global software export business.

Global Offshore Associates Limited (GOAL), which provides companies in Europe and North America with outsourced personnel from Russia, Ukraine, Bulgaria, Belarus and Latvia, singled out Ukraine as the most attractive outsourcing destination in Eastern Europe.

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